††††† NECESSITY,
FUNCTION, AND CONFORMITY: The Cabinet for Health and Family Services,
Department for Medicaid Services has responsibility to administer the Medicaid
Program. KRS 205.520(3) authorizes the cabinet, by administrative regulation,
to comply with a requirement that may be imposed, or opportunity presented by
federal law for the provision of medical assistance to Kentucky's indigent
citizenry. 42 U.S.C. 1396e(a) through (e) authorizes states to establish a
health insurance premium payment, or HIPP, program to provide health insurance
coverage outside of Medicaid to Medicaid enrollees, and any family member of
Medicaid enrollees if the department determines that HIPP program participation
would be cost effective for the department. This administrative regulation establishes
Kentuckyís health insurance premium payment program requirements as authorized
by 42 U.S.C. 1396e(a) through (e).

††††† (4) "Group
health insurance plan" means any plan, including a self-insured plan, of,
or contributed to by, an employer to provide health care directly or otherwise
to the employerís employees, former employees, or the families of the employees
or former employees, if the plan:

††††† (10)
"Spend-down program" means a program by which an individual becomes
eligible for Medicaid benefits:

††††† (a) By spending
down income in excess of the Medicaid income threshold; and

††††† (b) In accordance
with 907 KAR 1:640.

††††† (11) "State
plan" is defined in 42 C.F.R. 430.10.

††††† (12)
"Wrap-around coverage" means coverage of a benefit not covered by an
individualís group health insurance plan.

††††† Section 2. HIPP
Program Eligibility and Enrollment. (1) A Medicaid enrollee, or a person acting
on the Medicaid enrolleeís behalf, shall cooperate in providing information to
the department necessary for the department to establish availability and cost
effectiveness of a group health insurance plan by:

††††† (b) Submitting the
Kentucky Health Insurance Premium Payment Program Application to the
individualís local Department for Community Based Services office.

††††† (2) If a Medicaid
enrollee HIPP program applicant, participant, parent, guardian, or caretaker
fails to provide information to the department, within ten (10) days of the
departmentís request, necessary to determine availability and cost
effectiveness of a group health insurance plan, the department shall not enroll
the applicant in the HIPP program unless good cause for failure to cooperate is
demonstrated to the department within thirty (30) days of the departmentís
denial.

††††† (3) Good cause for
failure to cooperate shall exist if:

††††† (a) There was a
serious illness or death of the applicant, participant, parent, guardian, or
caretaker or of a member of the applicantís, participantís, parentís,
guardianís, or caretakerís immediate family;

††††† (b) There was a
fire, tornado, flood, or similar family emergency or household disaster;

††††† (c) The applicant,
participant, parent, guardian, or caretaker demonstrates that a good cause
beyond that individualís control occurred; or

††††† (d) There was a
failure to receive the departmentís request for information or notification for
a reason not attributable to the applicant, participant, parent, guardian, or caretaker
occurred. The lack of a forwarding address shall be attributable to the
applicant, participant, parent, guardian, or caretaker.

††††† (4) For a Medicaid
enrollee who is a HIPP program participant:

††††† (a) The department
shall pay all group health insurance plan premiums and deductibles, coinsurance
and other cost-sharing obligations for items and services otherwise covered
under Medicaid; and

††††† (b)1. The
individualís group health insurance plan shall be the primary payer; and

††††† 2. The department
shall be the payer of last resort.

††††† (5) For a HIPP
program participating family member who is not a Medicaid enrollee:

††††† (a) The department
shall pay a HIPP program premium; and

††††† (b) Not pay a
deductible, coinsurance or other cost-sharing obligation.

††††† (6) If an
individual who was a Medicaid enrollee at the time the department initiated a
HIPP program cost effectiveness review for the individual loses Medicaid
eligibility by the time the cost effectiveness review has been conducted, the
department shall not enroll the individual or any family member into the HIPP
program.

††††† Section 3.
Wrap-around Coverage. (1) If a service to which a health insurance premium payment
program participant would be entitled via Medicaid is not provided by the
individualís group health insurance plan, the department shall reimburse for
the service.

††††† (2) For a service
referenced in subsection (1) of this section, the department shall reimburse:

††††† (a) The provider
of the service; and

††††† (b) In accordance
with the departmentís administrative regulation governing reimbursement for the
given service. For example, a wrap-around dental service shall be reimbursed in
accordance with 907 KAR 1:626.

††††† Section 4. Cost
Effectiveness. (1) Enrollment in a group health insurance plan shall be
considered cost effective if the cost of paying the premiums, coinsurance, deductibles
and other cost-sharing obligations, and additional administrative costs is estimated
to be less than the amount paid for an equivalent set of Medicaid services.

††††† (2) When
determining cost effectiveness of a group health insurance plan, the department
shall consider the following information:

††††† (a) The cost of
the insurance premium, coinsurance, and deductible;

††††† (b) The scope of
services covered under the insurance plan, including exclusions for pre-existing
conditions, exclusions to enrollment, and lifetime maximum benefits imposed;

††††† (c) The average
anticipated Medicaid utilization:

††††† 1. By age, sex,
and coverage group for persons covered under the insurance plan; and

††††† 2. Using a
statewide average for the geographic component;

††††† (d) The specific
health-related circumstances of the persons covered under the insurance plan;
and

††††† (e) Annual
administrative expenditures of an amount determined by the department per Medicaid
participant covered under the group health insurance plan.

††††† (b) Any of the
individuals covered under the group health insurance plan lose full Medicaid
eligibility; or

††††† (c) There is a:

††††† 1. Change in
Medicaid eligibility;

††††† 2. Loss of
employment if the insurance is through an employer; or

††††† 3. Decrease in the
services covered under the policy.

††††† (3)(a) A health
insurance premium payment program participant who is a Medicaid enrollee, or a
person on that individualís behalf, shall report all changes concerning health
insurance coverage to the participantís local Department for Community Based
Services (DCBS), Division of Family Support within ten (10) days of the change.

††††† (b) Except as
allowed in subsection (4) of this section, if a Medicaid enrollee who is a
health insurance premium payment program participant fails to comply with
paragraph (a) of this subsection, the department shall disenroll from the HIPP
program the HIPP program participating Medicaid enrollee, and any family member
enrolled in the HIPP program directly through the individual if applicable.

††††† (4) The department
shall not disenroll an individual from HIPP program participation if the
individual demonstrates to the department, within thirty (30) days of notice of
HIPP program disenrollment, good cause for failing to comply with subsection
(3) of this section.

††††† (5) Good cause for
failing to comply with subsection (3) of this section shall exist if:

††††† (a) There was a
serious illness or death of the individual, parent, guardian, or caretaker or a
member of the individualís, parentís guardianís, or caretakerís immediate
family;

††††† (b) There was a
fire, tornado, flood, or similar family emergency or household disaster;

††††† (c) The
individual, parent, guardian, or caretaker demonstrates that a good cause
beyond that individualís control occurred; or

††††† (d) There was a
failure to receive the departmentís request for information or notification for
a reason not attributable to the individual, parent, guardian, or caretaker. The
lack of a forwarding address shall be attributable to the individual, parent,
guardian, or caretaker.

††††† Section 6.
Coverage of Non-Medicaid Family Members. (1) If determined to be cost
effective, the department shall enroll a family member who is not a Medicaid
enrollee into the HIPP program if the family member has group health insurance
plan coverage through which the department can obtain health insurance coverage
for a Medicaid-enrollee in the family.

††††† (2) The needs of a
family member who is not a Medicaid enrollee shall not be taken into
consideration when determining cost effectiveness of a group health insurance plan.

††††† (3) The department
shall:

††††† (a) Pay a HIPP
program premium on behalf of a HIPP program participating family member who is
not a Medicaid enrollee; and

††††† (b) Not pay a
deductible, coinsurance, or other cost-sharing obligation on behalf of a HIPP
program participating family member who is not a Medicaid enrollee.

††††† Section 7.
Exceptions. The department shall not pay a premium:

††††† (1) For a group
health insurance plan if the plan is designed to provide coverage for a period
of time less than the standard one-year coverage period;

††††† (2) For a group
health insurance plan if the plan is a school plan offered on the basis of
attendance or enrollment at the school;

††††† (3) If the premium
is used to meet a spend-down obligation and all persons in the household are
eligible or potentially eligible only under the spend-down program pursuant to
907 KAR 1:640. If any household member is eligible for full Medicaid benefits,
the premium shall:

††††† (a) Be paid if it
is determined to be cost effective when considering only the household members
receiving full Medicaid coverage; and

††††† (b) Not be allowed
as a deduction to meet the spend-down obligation for those household members
participating in the spend-down program.

††††† (4) For a group
health insurance plan if the plan is an indemnity policy which supplements the
policy holderís income or pays only a predetermined amount for services covered
under the policy.

††††† Section 8.
Duplicate Policies. (1) If more than one (1) group health insurance plan or
policy is available, the department shall pay only for the most cost-effective
plan except as allowed in subsection (2) of this section.

††††† (2) If the
department is buying in to the cost of Medicare Part A or Part B for an
eligible Medicare beneficiary, the cost of premiums for a Medicare supplemental
insurance policy shall also be paid if the department determines that it is
likely to be cost effective to do so.

††††† Section 9.
Discontinuance of Premium Payments. (1) If all Medicaid-enrollee household
members covered under a group health insurance plan lose Medicaid eligibility,
the department shall discontinue HIPP program payments as of the month of
Medicaid ineligibility.

††††† (2) If one (1) or
more, but not all, of a householdís Medicaid-enrollee members covered under a
group health insurance plan lose Medicaid eligibility, the department shall
re-determine cost effectiveness of the group health insurance plan in
accordance with Section 5(2) of this administrative regulation.

††††† Section 10. Health
Insurance Premium Payment Program Payment Effective Date. (1)(a) HIPP program
payments for cost-effective group health insurance plans shall begin with the
month the health insurance premium payment program application is received by
the department, or the effective date of Medicaid eligibility, whichever is
later.

††††† (b) If an
individual is not currently enrolled in a cost effective group health insurance
plan, premium payments shall begin in the month in which the first premium
payment is due after enrollment occurs.

††††† (2) The department
shall not make a payment for a premium which is used as an income deduction
when determining individual eligibility for Medicaid.

††††† Section 11.
Premium Refunds. The department shall be entitled to any premium refund due to:

††††† (1) Overpayment of
a premium; or

††††† (2) Payment for an
inactive policy for any time period for which the department paid the premium.

††††† (1) Applicant, in
writing, of the departmentís initial decision regarding cost effectiveness of a
group health insurance plan and HIPP program payment; or

††††† (2) Participating household,
in writing:

††††† (a) If HIPP
program payments are being discontinued due to Medicaid eligibility being lost
by all individuals covered under the group health insurance plan;

††††† (b) If the group
health insurance plan is no longer available to the family; or

††††† (c) Of a decision
to discontinue HIPP program payment due to the departmentís determination that
the policy is no longer cost effective.

††††† Section 13.
Federal Financial Participation. (1) The departmentís health insurance premium
program shall be contingent upon the receipt of federal financial participation
for the program.

††††† (2) If federal
financial participation is not provided to the department for the departmentís
health insurance premium program, the program shall cease to exist.

††††† (3) If the Centers
for Medicare and Medicaid Services (CMS) disapproves a provision stated in an
amendment to the state plan, which is also stated in this administrative
regulation, the provision shall be null and void.

††††† (2) This material
may be inspected, copied, or obtained, subject to applicable copyright law, at
the Department for Medicaid Services, 275 East Main Street, Frankfort, Kentucky
40621, Monday through Friday, 8 a.m. to 4:30 p.m., or from the department's Web
site at http://www.chfs.ky.gov/dms/incorporated.htm.
(37 Ky.R. 986; eff. 11-05-2010.)